{"id":19445,"date":"2022-02-23T07:30:45","date_gmt":"2022-02-23T12:30:45","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=19445"},"modified":"2022-02-23T07:30:45","modified_gmt":"2022-02-23T12:30:45","slug":"what-a-russian-invasion-really-means-for-crude-oil","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/what-a-russian-invasion-really-means-for-crude-oil\/","title":{"rendered":"What a Russian Invasion Really Means for Crude Oil"},"content":{"rendered":"

Tensions along the Ukrainian border with Russia have dominated headlines over the last few weeks.<\/p>\n

What started as aggressive posturing has now led to a de facto occupation of eastern Ukraine by the Russian military.<\/p>\n

On Monday, Russian President Vladimir Putin ordered troops into Donetsk and Luhansk. Putin declared that Russia would recognize the two regions as being “independent.”<\/p>\n

This is a marked escalation and things now appear to be at a boiling point…<\/p>\n

Today, I want to look at what that means for one market in particular… crude oil prices.<\/p>\n

The current narrative around oil is that armed conflict will put further strain on an already tight supply.<\/p>\n

After all, Russia is one of the world’s largest producers of crude oil…<\/p>\n

But I don’t think it’s that simple.<\/p>\n

My analysis suggests that we’ll see a short-term spike in oil prices, but such a rally would ultimately be short lived.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Importance of 2008<\/h2>\n

2008 was the start of a new trend for crude oil.<\/p>\n

Since then, the Russian military has taken two significant actions…<\/p>\n

First, they invaded Georgia in August of 2008.<\/p>\n

Second, they annexed the Crimean Peninsula in February 2014.<\/p>\n

Let’s see what oil prices did on each of those dates…<\/p>\n

\"Chart\"<\/div>\n

Notice how around the time of both those conflicts, the price of oil did the opposite<\/em> of what most analysts would expect. Instead of a mega rally, oil sold off hard<\/em>.<\/p>\n

After the invasion of Georgia, oil prices plunged as much as 63% before finding a floor.<\/p>\n

The annexation of Crimea saw oil prices dive as much as 66% over the next two years.<\/p>\n

In both instances, crude oil was trading a little over $100 a barrel (between the two red lines).<\/p>\n

Today, crude oil is trading around $92 a barrel and rising…<\/p>\n

Any armed conflict could see a temporary spike that would take prices into the $100 per barrel range… leaving oil vulnerable to a sharp selloff after reaching this target.<\/p>\n

In the past, the $100 range in crude oil has served as an exceptionally strong technical resistance. I wouldn’t count against it failing this time around.<\/p>\n

Ultimately, there are two ways to play this…<\/p>\n

You can establish a long position in anticipation of a run up to the $100 level. That way, you’ll take advantage of a rise in crude oil prices.<\/p>\n

Or you can establish a short position for the bigger reversal to come. If crude oil sells off as hard as the last two military events, it should be a nice profit for traders.<\/p>\n

Happy Trading,<\/p>\n

Imre Gams
Analyst, Market Minute<\/em><\/p>\n

<\/p>\n

Reader Mailbag<\/h2>\n

In today\u2019s mailbag, Jeff Clark Trader<\/em> member Kathleen shares her thoughts on Jeff\u2019s recent essay about three truths to options trading\u2026<\/a><\/p>\n

\n

This excellent article needs to be transformed into a video training session with some more depth into measuring risk and return. Thank you and amen!<\/p>\n

– Kathleen R.<\/strong><\/p>\n<\/blockquote>\n

Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

There are two ways to play this…<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[76],"newsletter-type":[],"ticker":[],"class_list":["post-19445","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-imre-gams"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19445","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=19445"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19445\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=19445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=19445"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=19445"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=19445"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=19445"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=19445"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=19445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}